Stephen Beaumont
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Seasonality - how do we navigate through it?

6/27/2011

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Yesterday, Ginnie and I visited a new ice cream parlor located on the South Pier of Sheboygan. The weather was perfect and the whole area was a-buzz with activity. The Blue Harbor Hotel was obviously running at high occupancy, the mini-golf course was crawling with people, the patio of the Italian Restaurant was pretty with umbrellas shading late afternoon diners and the ice cream parlor had people lining up out of the doors. Yachts and motor boats were gliding in and out of the harbor,  there was a light, warm breeze that kept everyone comfortable and there were no bugs. We remarked that the scene could not have been more perfect.

The ice cream parlor had been featured in the local paper yesterday morning, and the owners were remarking that it had really drawn the crowds and they were having one of their busiest days yet. It was so wonderful to watch their success and then, as we walked up and down the pier, I reflected on a sobering thought. The numbers of perfect summer days like this are pretty few in South Eastern Wisconsin. What will it look like here in November, December, January and February? How many people will be lining up for ice cream on this off-the-beaten-track area of the city even in March? This year we had snow right into April and this summer we have had a fair share of cool, wet days too.

Most businesses that offer any kind of hospitality service have to navigate through some element of seasonality. Unless you are located in Southern California, it is likely that there will be some times of the year when the weather is less kind to business than others.  How do we have a successful business when we only have a few months of optimum conditions and what should we do to minimize the effects of slow business in the "low season"?

The old adage that a business needs three things to be successful - location, location and location really holds true more than ever before as we continue to claw our way out of this recession. If our business is located in a location that has no traffic or little appeal for half the year, then it will be exceedingly difficult to be profitable. Most hotels need to run at a minimum of 70% occupancy year round. Even if you run in the 90s for six months of the year, that means you still have to run at 50% for the other six months. That is an increasingly difficult challenge for some hotels particularly when rates are also being driven down by a "buyer's market" .  The same goes with ice cream parlors. The lines outside the doors in June, July and August need to be VERY long to survive the winter famine.

So what do we do? Basic as it seems, there are really only two ways to succeed in a seasonal market. The first is to do everything possible to steal market share and maintain the highest levels of business possible in the low season. This needs to include building loyalty to our brand, encouraging what business there is to use us rather than the competition and to come up with innovative ways to bring in new business as well as maintaining our current position. Social media has a lot of potential to help in this area, and an intelligent pricing policy (or revenue management strategy) is essential to balance rate (or price) and volume. The other essential but equally difficult thing to do, is to reduce costs to the bare minimum WITHOUT negatively impacting your customer or guest experience. And herein lies the challenge. As hospitality and business leaders, we have to walk the fine line of cost cutting while ensuring that we don't undo the reputation that we have worked so hard to build in the high season, because now, more than ever, we need loyal customers.

Our ice cream parlor will likely struggle in the winter. Hopefully that has been fully fleshed out in their business plan and they have not been too optimistic in their revenue projections. If they can reduce costs or maybe even close altogether for the winter, they stand a good chance of succeeding. But even if they close, there are ongoing fixed costs that don't disappear. Cash flow becomes critical.  If they could pick up the parlor and put it in Malibu, California, they would have a greater chance of success. But people want ice cream in Sheboygan as much as California and I am pleased they are taking the chance and putting everything into it to provide a great summer experience for visitors. They will have to navigate the seasons as carefully as the mariners who take their boats up and down the estuary. Lets hope that the seasonal rocks don't snag them and they come out unscathed.
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Epic Journey - Final day and reflections

6/10/2011

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We returned from our epic journey almost three weeks ago and yet I have not been able to find the time to complete this blog until now, as it is has been completely manic since we got back on the house selling and job hunting fronts. However, the last day was as interesting as the others.

We left our very nice hotel near Sioux Falls,  South Dakota and headed due east on Interstate 90, quickly crossing into Minnesota. I had looked for some Minnesota wineries that we might be able to visit en route that were not too far from the Interstate (this was going to be a 575 mile day and so we didn't have time for long detours) and located one near Rochester. 

Salem Glen Vineyard is a small farm winery that has been operating since 2007 making wines from cold-hardy variety grapes grown on property and around the region. There are no signs to it and you access the winery along a long, straight, dusty earth road. On Saturday afternoons, they often have live jazz in the tasting room (which opened in October 2009) and this beautiful, sunny Saturday afternoon there were a couple of dozen people enjoying the music and wine. If we had more time we would have stayed longer as the atmosphere was wonderful.

Winemaker and owner, Dustin Ebert kindly took some time to show me around the winery, pointing out the astronomy observatory that is used as a logo on the wine label and explaining that he makes the wine in the garage attached to the house. A true 'garagiste".  About 1/3 of his grapes are grown on property and the rest he purchases regionally, within a 120 mile radius. Varieties include Seyval Blanc, Edelweiss, Frontenac Gris, Marquette (that was developed at the University of Minnesota) and Marechal Foch which we also saw in Nebraska. Dustin is a self taught winemaker who is extremely passionate about the wines, making about 1000 cases per year.   I asked him if he is particularly proud of any of his varietals. Currently, he really likes the Marquette and I was able to taste it with him. Well structured and balanced, the body is relatively light but the flavors are richer than I anticipated with aromas of cherry and a pleasing peppery finish. I was pleased to finish our trip at this beautiful little winery that epitomizes the philosophies of so many that we had visited in the 30 days we were away. Passion, individuality, experimentation and most of all a love of the land, and the vines that ultimately define the finished product. Wine should be for everyone and at Salem Glen, everyone is welcome. No pretence or stuffiness, just plain good fun!

After a drive through Wisconsin Dells (which we had never visited in ten years and for which we felt a bit guilty that we had never taken our kids there during their visits) we arrived back at our newly-painted-soon-to-be-sold house in Sheboygan at about 9:30pm, tired, safe and elated at having completed this epic journey.


As I reflect on the trip in which we traveled 7,500 miles, crossed 13 states and one Canadian province and visited dozens of wineries, I am in awe of several things. First, the sheer beauty of the different states and provinces. Each has an individuality and character that is unique and a personality that is distinct. It would be as impossible to pick a favorite state as it would be to pick a favorite wine. Certainly, drinking wine in the region in which it is made adds a whole different dimension to the enjoyment.

Second, the variety of wines, the different personalities of the winemakers, the beauty of the areas in which they are made and the zest for life that is engendered by everyone involved in the winemaking world has left an indelible imprint on us both. 

Third, I am in awe of our little puppy, Hopi. Spending that amount of time in the car, going to different hotels and cottages all the time could have been unsettling, but he was a trooper and so well behaved. The world is gradually becoming more doggy friendly and it was great for us to be able to have him with us both.

We are both so please we took the time and made the trip. I was able to continue the job search process and networking with the help of cell phone and WiFi connections and since returning I'm pleased to say that the job market appears to have brightened somewhat. There are several positions that I am pursuing in different parts of the country and with a little luck, one of them will come through and set us on our next adventure. 

Our house selling adventures are another story, and a bit of a roller coaster, having had one sale fall through. However that too will work itself out in time.  Whatever happens we have the memories, blogs and photographs from our trip and have experienced something that we will hold close to our hearts for the rest of our lives.

Don't forget to check out Ginnie's blog too
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    Stephen Beaumont CWE

    Stephen Beaumont

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